Viju Koolara Veetil, 36, who worked for a garment company in Kuwait, was kidnapped by the militants in Sulu in Jun 2011 while visiting his wife's family in Patikul.
He escaped from his captors and was found by residents of a Parang village, which he did not name, towards midnight yesterday, Senior Superintendent Antonio Freyra, Sulu police chief, said.
"He is now in the custody of the Sulu provincial police office and is undergoing medical checkup and debriefing," Freyra was quoted by Inquirer News.
In March, the Sulu police said it got information that Veetil was executed by the Abu Sayyaf because his family could not pay ransom, the Inquirer reported.
The kidnappers demanded about 300,000 pesos (USD 7,100) in ransom, but his family refused to pay. He said he wasn't harmed because he is a Muslim.
The Abu Sayyaf is known for kidnappings, beheadings and bombings, and is on the US list of terrorist groups. The group is believed to be currently holding Australian, Malaysian and Japanese nationals in their captivity.